Add TAGS to your cases to easily locate them or to build your SYLLABUS.
Please SIGN IN to use this feature.
Highlight text as FACTS, ISSUES, RULING, PRINCIPLES to generate case DIGESTS and REVIEWERS.
Please LOGIN use this feature.
Show printable version with highlights

[ GR No. L-9473, Nov 28, 1959 ]



106 Phil. 554

[ G.R. No. L-9473, November 28, 1959 ]




Sometime in 1953, Mrs. Trinidad de Leon Vda. de Roxa filed an action in the  Court of First  Instance  of Manila for the foreclosure of the real estate mortgage made m her favor by the espouses Fernando Ocampo and Lourdes Luciano Ocampo for the security of a debt of P120,000.00 payable with 10%  interest.  As  several months  elapsed  without the case being heard, the plaintiff Mrs. Roxas,  after consulting Judge Gavino S.  Abaya, then presiding one of the branches of the court, withdrew her suit,  and availing of the services of herein petitioner Atty. Rosario  de Jesus-Alano  upon the recommendation of  Judge Abaya, sought extrajudicial foreclosure, pursuant  to Act No. 3135,  as amended, by  filing  the  necessary  application  with  the Sheriff of Manila.  Acting on the application, the sheriff sold the mortgaged property at public auction and out of the net proceeds of the  sale delivered to Mrs.  Roxas the sum of P153,020.00 representing the principal of the mortgage loan and its compounded  interest.   But it  appears that, in addition to the said sum, Mrs. Roxas claimed that she was entitled to 10%  attorney's fees, or P15,302.00, for on April 27, 1954 the  herein petitioner Rosario de JesusAlano acting "for and in behalf" of Mrs. Roxas and signing as her attorney, so informed the sheriff by letter and  even asked that the claim for attorney's fees be given preference over other claims.  Due to  this claim of  Mrs. Roxas, the sheriff refused to satisfy fully from  the balance of the proceeds still in his hands the claims of various creditors against the  Ocampo espouses until the said claim could be decided by the court.  And the sheriff having in  particular declined to pay a part of the claim of judgment creditor Pacita de los  Reyes Philipps, the latter brought suit in the Court of First Instance of Manila (Civil Case No. 22881) impleading, among others, the sheriff and Mrs. Roxas, as defendants, for the payment of the balance of her claim amounting to P5.145.50,  plus  damages.  The  complaint alleged  that Mrs. Roxas was not entitled to any attorney's fees because  the mortgage provided for the  payment of such fee  only  in  case of judicial  foreclosure.  In  her answer, which  was  signed by  herein petitioner Rosario de Jesus-Alano as attorney, Mrs. Roxas reiterated her claim for attorney's fees and citing Art. 2208 of  the new  Civil Code, contended that it was only just and  equitable that such fees  be  paid to her.  The answer also  contained a counterclaim for moral damages.  After hearing, the court, in its decision dated  January 31, 1955,  denied the claim for damages and fixed the amount to be paid by the sheriff out of the money still in his hands to the different claimants. And  considering the  extrajudicial as but  a continuation of  the  judicial foreclosure previously  filed and on the authority of articles 1167,  1247  and 2208 of the new Civil Code, the  court made the following adjudication in favor of Mrs. Roxas:
"PREMISES CONSIDERED,  the Sheriff of the City of Manila is hereby ordered to deliver the corresponding  claims of the  claimants in the following order of priority:

"1. To Mrs.  Trinidad  de Leon  Vda.  de Roxas, the amount of P2,500.00 representing her attorney's fees and other expenses incurred in the foreclosure proceedings;"
Two months  thereafter, or on March 31, 1955,  on  motion of  herein  petitioner  Rosario de Jesus-Alano,  the court issued the following  order of execution:
"Petition  for  execution dated March 30, 1955, filed by counsel for defendant Mrs.  Trinidad  de Leon Vda. de Roxas being meritorious, the same is  granted.  Let a writ of execution issue in this case and the amount  of P2,500.00 be delivered to Atty. Rosario de Jesus Alano being the lawyer of defendant Mrs. Trinidad de Leon Vda. de Roxas,

In obedience to  this order, the  sheriff, on April 21, 1955, delivered to herein petitioner Central Bank Check No. CB063360  in the sum  of P2,497.00.

Some 55 days thereafter, or on June 15, 1955, Atty. Jose Topacio Nueno, as attorney for Mrs. Roxas, filed in the same court  a petition oh her behalf, alleging in substance that the sum adjudged to  her in  Civil Case No. 22881 as attorney's fee belong to her and not to Rosario de Jesus-Alano, who  had no right to the same because she had never engaged the latter's professional services as a lawyer  and if the latter had any  claim for such services, said claim had  already been fully satisfied with the P350.00 paid to her; that the motion  for  execution  was filed by  Rosario de Jesus-Alano  without her, Mrs. Roxas', knowledge  and consent; and that she was  not even notified thereof.   Mrs. Roxas, therefore, asked that Atty.  Rosario de Jesus-Alano be ordered to deliver the sum of P2,500.00 to her.   By way of answer  to this petition, Atty.  Rosario de Jesus-Alano filed a manifestation stating, among other things, that the court had already  lost its jurisdiction over the case, the judgment haying already  become final; that the order of execution directing the delivery to her of  the amount of P2,500.00 was based on the fact that she acted as counsel for Mrs. Roxas in the extrajudicial foreclosure proceedings against the Ocampo espouses, and the amount was awarded, upon her petition, in her favor, "as her lien for her attorney's fees"; that all she received from Mrs. Roxas for fees and  expenses was the  amount of P350.00; and that in the case instituted  by Pacita de los Reyes Philipps she again represented Mrs. Roxas but only to get her attorney's fees. After hearing, the court  rendered on June 18,  1955 an order which reads in part as follows:
"In view of the sworn statement submitted by Mrs. Roxas and in order to determine, first,  if Atty. Alano was  really the lawyer of Mrs. Roxas or not, and second if the answer is in the affirmative, to  what amount said Mrs. Alano is entitled for her services in accordance with  the accepted rules  as laid down in the  case of Delgado vs. De la Rama,  the Court  hereby orders Atty. Alano to return and deposit with the Clerk of  Court the amount of P2,500.00 within five (5) days from  today and  upon her failure to do so, the Court will declare said Atty. Alano in contempt of court and  order her immediate arrest.

"The Court hereby sets  the hearing of this motion on Saturday, June 25, 1955, at 8; 00 o'clock in the morning, for. the reception of evidence of both  parties  in support of their respective contentions."
Atty.  Rosario de Jesus-Alano  asked for reconsideration of the order, contending that the court  acted without jurisdiction  because the decision of January 31,  1965  is not only final but was already executed and the court  had no power to modify it as no motion to set it aside under Rule 38  of the Rules  of  Court had been  presented; that as counsel to Mrs,  Roxas, she is  unquestionably entitled to receive the amount of  P2,500.00 since the  latter does not claim the amount as her own but as fees for her attorney; that the petition of Mrs. Roxas  is in the nature of a suit, and that the order of  the  court requiring  her, petitioner, to  deposit the amount with the clerk of court is  in the nature of  a preliminary attachment,  which is illegal because it is not based on  any of the grounds provided for in  the Rules of Court; that the order was issued without hearing evidence and therefore violative of the due process clause of the Constitution; and  that the  order is likewise violative  of the constitutional  "provision  that no  person shall be imprisoned for debt and that an accused  is presumed innocent until the contrary is  proved,  since in the event that she, petitioner, has  no money now to  deposit with the clerk of court, she would be arrested in accordance with the tenor of the order.  The motion  having been denied, Atty. Rosario  de Jesus-Alano has now come to this Court through a  petition for certiorari  to have the order of June  18, 1955 annulled "as issued without jurisdiction, besides being  manifestly arbitrary,  unjust, and unconstitutional."

The petition, we think, should be granted.

Examining the decision  of January 31, 1955  in Civil Case No.  22881, we there find that  the lower  court,  in awarding  the amount of P2,500.00 in favor of  the respondent Mrs. Roxas as "attorney's fees and other expenses incurred in the foreclosure proceedings,'1 took into account the standing of her attorney obviously referring to herein petitioner Rosario de Jesus-Alano and actually considered that amount  as the "equitable and just attorney's fees." Thus the court said:
"With respect to this point, the Court believes  and so holds that the amount of P2,500.00 is a reasonable amount that can be given to Mrs.  Roxas as her  attorney's fees and other incidental expenses incurred by her in  the foreclosure of the mortgage judicially and extrajudicially.  under the circumstances, and taking into account the standing of her attorney, the Court considers this amount  of P2.500.00 as the equitable and just attorney's fees."
The respondent Mrs. Roxas, who  appears  to be claiming the amount of P2,500.00  not for herself but for her attorney, has not contested the value of the  professional services rendered by her lawyer, herein petitioner,  as  fixed by the lower court.  Indeed, the decision has  already become final and  therefore conclusive as to the parties.   Neither has Mrs. Roxas claimed that she  engaged the legal  services of an attorney  other than herein petitioner Atty.  Rosario de Jesus-Alano for  the foreclosure of the real estate mortgage made in her favor.  Another attorney, it is true represented her, Mrs. Roxas,  in the action filed for judicial foreclosure which  was later withdrawn without the case being heard that it does not appear that this  attorney has  ever asserted  any claim  for  attorney's fees.  This could very  well be  the explanation why Mrs. Roxas did not insist upon  her original claim of P15,032.00 for attorney's fees and  instead had  it reduced to  only P3,000.00. Upon the other  hand, it is not disputed that petitioner had actually rendered professional services to  Mrs.  Roxas in the foreclosure proceedings which resulted in the  latter being able to recover the total sum of P153,020.00 representing the principal of the mortgage loan and its  compounded interest.  The  record also shows that petitioner appeared as counsel for Mrs. Roxas in Civil Case No. 22881, which appearance, in the absence of any showing to the contrary, is presumed to be  authorized.   (Sec.  20,  Rule 127, Rules of Court.)

It  will thus be seen  that the lower court has, in its decision of January 31,  1955 in Civil Case No.  22881, already fixed  at P2,500.00 the value of herein petitioner's legal services  rendered  to Mrs.  Roxas.   Apparently, the court was familiar with the nature and extent of petitioner's professional services to Mrs. Roxas,  for it expressly found that amount "under the circumstances and  taking into account the standing of her attorney  *  *  *  as the equitable and just attorney's fees."  Such being the  case, and considering the facts on record, we see no valid reason Why the court should still require a hearing to determine, as stated in the order complained of, petitioner's right to attorney's fees and compel her to  pay the sum of P2,500.00 into the court preliminary to that hearing under pain of contempt and imprisonment in case of failure to do so. To hold such a hearing  would only result in duplicity of proceedings and would furthermore have the effect of permitting the reopening of a case which has already become final.

In any event, it is to be observed that the  amount of P2,500.00 in question was by the writ of execution ordered delivered to petitioner, she "being the lawyer of the defend   ant Mrs. Trinidad  de Leon  Vda. de Roxas."  Petitioner has, therefore, acquired, and may validly exercise, a general or. retaining lien  over the amount of P2,500.00.  As provided in the first sentence of section 33 of Rule 127 of the Rules of Court, "An attorney shall have a lien  upon the funds, documents and papers of his client  which have law  fully  come into his possession,  and may retain  the  same until  his lawful fees and disbursements have been  paid, and  may  apply such funds to  the satisfaction  thereof." Such lien has been held to extend to moneys collected by the attorney for his client in the course of his employment, whether or not upon  a judgment or award.   (5  Am. Jur. p. 389.)  The petitioner being in possession of the general or retaining lien conceded to  her by the first part of section  33 of Rule 127, there can be no question that she had the right to retain the amount of P2,500.00 and to apply it to the satisfaction of her  claim for attorney's  fees, the same having been  already  adjudicated as the reasonable value of her professional services to the respondent Mrs. Roxas.  Courts, in the exercise  of their  exclusive and supervisory authority over attorneys as officers of  the court, are bound to respect and protect the attorney's lien, which, as held in the case of Rustia vs. Abeto (72 Phil.,  133), "is necessary to preserve the  decorum and  respectability of the profession."  (See  also Ulanday vs.  Manila Railroad Co., 45 Phil., 540.)

We note, however, that petitioner had already been paid by the respondent Mrs. Roxas the amount of P350.00 during the foreclosure proceedings.  That amount, in the light of the view we have taken  of the case not to mention the fact  that there is no claim that the amount of  P2,500.00 adjudicated as professional fees is unreasonable or insufficient should be returned to the respondent Mrs. Roxas.

Wherefore,  it being  understood that the  amount of P350.00 shall be returned by  petitioner to the respondent Mrs.  Trinidad  de Leon Vda. de  Roxas, the petition for certiorari is granted,  and the  preliminary injunction  heretofore issued made permanent.  Without costs.

Paras, C. J., Bengzon, Padilla, Labrador, and Barrera, JJ., concur.